Tax Uncertainty Plagues Munis

A selloff in early December persisted through the middle of last week, when munis stabilized. But the uncertainty continues to prey on investors.

Municipal bonds are known for their dependability. And after a banner year in 2011, they once again turned in a solid, if not record-breaking, performance, returning 6.6% in 2012 to date, according to a Barclays index.

Munis are also known for providing tax-free interest income. But heading into 2013, that fundamental tenet remains under genuine threat amid the ongoing, ineffectual fiscal-cliff talks in Washington.